With less than two weeks to go before Christmas, many marketers are gearing up for what they hope will be some of their busiest days of the year. But how are we doing so far?
Overall it’s been a slow start, as shoppers seem to be procrastinating this holiday shopping season. Some analysts are blaming unseasonably warm weather in November, which tends to hurt apparel sales. The Department of Commerce on Dec. 13 will announce November retail sales data that are expected to show a scant 0.1% growth. What growth there is resulted largely from sales of consumer electronics and apparel. Sales of home goods, once a hot category, are lagging due to the softer housing market.
Most expect sales to pick up, as the holiday gets closer and the weather gets cooler, but more holdouts may wait for the bargains. In a survey conducted for Reuters, America’s Research Group found that more than a quarter of shoppers plan to wait until after Christmas to buy items for themselves or as gifts, and that most have not purchased winter apparel so far this month. According to the group’s latest poll, 75% of Americans have not bought any winter apparel for themselves in December, while nearly 59% have not purchased any as gifts.
The survey of 800 consumers conducted this past weekend also found that among those respondents who are buying, toys are the most popular category, with 34% of shoppers buying them so far, up from 32% in 2005. Sales of electronics, driven by items such as high-definition TVs, are also on the rise, with 24% buying them, up from just 17% last year. Jewelry sales are also up, with 16% of shoppers already buying jewelry as gifts, up from 14% in 2005.
But many industry watchers feel the season will shape up to be a disappointment. While the National Retail Federation is sticking to its forecast that year-over-year holiday sales will increase 5%, to $457 billion, the International Council of Shopping Centers recently dropped its forecast by a half of a percentage point: It now expects a 2.5%-3% year-over-year sales gain this holiday season at stores open at least one year.
And Britt Beemer, chairman/founder of America’s Research Group, said that he expects comparable-store sales to rise just 2.7% this holiday season, down from a forecast for 3.1% growth he gave in early November. It was just the fourth time in 20 years that he has adjusted his forecast during the Christmas season.
A dearth of Christmas spirit and lackluster store service seems to be one reason for ho-hum retail sales. The America’s Research Group survey reports that 31% of respondents found stores less decorated this holiday season than in seasons past, and 24% noticed that stores were playing less Christmas music. Lower levels of staff in stores have driven 23% to leave without buying, up from 21% last year.
Maybe that will be good news for catalogers and Web merchants. Web sales are already exceeding some industry expectations: Internet research company ComScore Networks reported that total online spending (exclude travel, auctions, and large corporate purchases) from Nov. 1 through Dec. 8 reached $15.58 billion, up 25% from the same period last year. The performance so far is slightly above comScore’s holiday growth forecast of 24%.